When MercadoLibre (MELI) posted quarterly results, the stock popped, trading at around $1150. The rally faded quickly as Nasdaq selling rose. Traders have too short a memory to appreciate the upside potential in MELI stock.
In Q4, the online retailer posted revenue growing by 60%. Payment volume rose by 72.8% Y/Y to $24.2 billion on a foreign exchange neutral basis. Mobile gross merchandise volume topped 75.5% of GMV.
Investors have plenty to like about MELI stock. Revenue growth momentum remains strong. It has quality revenue. This includes recurring revenue, payment transaction revenue, and revenue from Mercado Pago accounts and Card transactions.
Despite a steady increase in unique active users, from 132.5 million to 139.5 million Y/Y, customer activity is up. It posted a net income of $83.3 million, up from a small loss last year.
Shopify (SHOP) shares a downtrend with MercadoLibre stock. It differs because it warned that growth would decelerate. In Q1/2022, Shopify anticipates a “pandemic reset” with consumers. It also has new terms with apps and theme developers. This will result in an unfavorable Y/Y comparison. Shopify’s product development will add to costs. It does not expect a rebound in growth from those investments until later this year.
Your Takeaway
MELI stock has strong growth ahead. Shopify’s potential is uncertain for 2022. Markets dislike uncertainty, making MELI a better choice.